Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Monday, November 30, 2020

Collusive Market Allocations

Collusive Market Allocations

By:

Iossa, Elisabetta; Loertscher, Simon; Marx, Leslie; Rey, Patrick

Abstract:

Collusive schemes by suppliers often take the form of allocating customers or markets among cartel members. We analyze incentives for suppliers to initiate and sustain such a collusive schemes in a repeated procurement setting. We show that, contrary to some prevailing beliefs, staggered (versus synchronized) purchasing does not make collusion more difficult to sustain or initiate. Buyer defensive measures include synchronized rather than staggered purchasing, first-price rather than second-price auctions, more aggressive or secrete reserve prices, longer contract lengths, withholding information, and avoiding observable registration procedures. Inefficiency induced by defensive measures is an often unrecognized social cost of collusive conduct.

URL:

http://d.repec.org/n?u=RePEc:tse:wpaper:124177&r=com

https://lawprofessors.typepad.com/antitrustprof_blog/2020/11/collusive-market-allocations.html

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